JSE-listed Allied Technologies (Altech) has bought SetOne, a Germany-based supplier of digital video broadcasting (DVB)-based products and solutions, for an undisclosed amount.
SetOne, formed in 2005, specialises in DVB set-top box (STB) receivers. It has expertise and key skills in the supply chain design phase and product management of these products.
South Africa is in the middle of migrating to digital television using the European DVB-T2 standard. Digital broadcasting will be turned off in April with the aim of switching off analogue signal towards the end of 2013.
The country will require an estimated 10 million decoders to convert the new signal for viewing on older televisions. There is also a potential market for about 100 million boxes in Africa.
Altech UEC recently opened an STB manufacturing facility, which was spurred on by SA's imminent move to digital television. The facility can produce three million decoders a year, a figure that can be doubled through the installation of new lines, which will take about three to four weeks, said Altech CEO Craig Venter, speaking at the opening ceremony.
Expansion opportunities
Altech's purchase of SetOne unlocks synergies with other Altech operations, in particular Altech Multimedia, which provides products, professional services and software solutions to the digital broadcast, broadband and telecommunications industries.
With headquarters in SA, Altech Multimedia also has operations in Europe, Australia, China and India. It offers solutions and services such as systems integration and application development across multiple multimedia platforms.
The unit is comprised of Altech UEC, Altech MediaVerge, Altech Global Decoder Logistics and Altech SetOne.
The listed company says the deal will expand Altech Multimedia's reach into international markets, as well as leverage established distribution channels, and allow it to exploit and cross-sell other business opportunities associated with its Global Decoder Logistics services.
“This acquisition enhances our ability to diversify Altech Multimedia's income streams by growing its international business footprint and reducing its reliance on locally-generated business, and is in line with the Altech group's strategy to increase non-SA revenue and profits,” says Venter.
“SetOne has established a significant track record in the STB repair and servicing business, and is a preferred supplier in the central European region in terms of its original equipment manufacturing capabilities. The company has produced profitable results since its inception,” Venter adds.
SetOne has built strategic alliances with key players in the value chain of its products and services offering throughout Asia and Europe, which include licence agreements with companies such as Sisvel, MPEG LA and Rovi.
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